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Fair Market Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Fair Market Value of Financial Assets and Liabilities [Abstract]

Fair Value Assets Measured on Recurring Basis

The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis as of December 31, 2019 and December 31, 2018 and indicate the level within the fair value hierarchy of the valuation techniques.

(in thousands)						Fair Value Measurements at December 31, 2019 Using
		Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets measured – recurring basis
Available-for-sale securities:
U.S. Treasury and government agencies		$	171,150			$	54,263			$	116,887			$	0
State and political subdivisions			102,307				0				102,307				0
U.S. government sponsored agency mortgage-backed securities			295,245				0				295,245				0
Other debt securities			31,142				0				31,142				0
Equity securities at fair value			1,953				0				0				1,953
Mortgage servicing rights			3,263				0				0				3,263

(in thousands)						Fair Value Measurements at December 31, 2018 Using
		Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets measured – recurring basis
Available-for-sale securities:
U.S. Treasury and government agencies		$	217,938			$	91,028			$	126,910			$	0
State and political subdivisions			124,488				0				124,488				0
U.S. government sponsored agency mortgage-backed securities			250,819				0				250,819				0
Other debt securities			501				0				501				0
Equity securities at fair value			1,173				0				0				1,173
Mortgage servicing rights			3,607				0				0				3,607

Reconciliation of the Beginning and Ending Balance of Recurring Fair Value Measurements Using Significant Unobservable (Level 3) Inputs

Following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheet using significant unobservable (Level 3) inputs:

(in thousands)		2019								2018
		Equity Securities at Fair Value				Mortgage Servicing Rights				Equity Securities at Fair Value				Mortgage Servicing Rights
Beginning balance		$	1,173			$	3,607			$	0			$	3,484
Total unrealized gains (losses)
Included in net income			780				(515	)			1,173				73
Issues			0				631				0				466
Settlements			0				(460	)			0				(416	)
Ending balance		$	1,953			$	3,263			$	1,173			$	3,607
Total gains (losses) for the period included in net income attributable to the change in unrealized gains or losses related to assets still held at the reporting date		$	780			$	(515	)		$	1,173			$	73

Realized and Unrealized Gains and Losses for Items Included in Net Income in the Consolidated Statements of Income

Realized and unrealized gains and losses for items reflected in the table above are included in net income in the consolidated statements of income as follows:

Noninterest Income
(in thousands)		2019				2018
Total gains (losses)		$	(195	)		$	830

Fair Value Measurements of Recognized Assets Measured on Nonrecurring Basis

The following tables present the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a nonrecurring basis as of December 31, 2019 and December 31, 2018 and indicate the level within the fair value hierarchy of the valuation techniques.

(in thousands)						Fair Value Measurements at December 31, 2019 Using
		Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets measured – nonrecurring basis
Impaired loans (collateral dependent)		$	3,217			$	0			$	0			$	3,217
Other real estate owned			12,593				0				0				12,593

(in thousands)						Fair Value Measurements at December 31, 2018 Using
		Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets measured – nonrecurring basis
Impaired loans (collateral dependent)		$	747			$	0			$	0			$	747
Other real estate owned			6,500				0				0				6,500

Quantitative Information about Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements at December 31, 2019 and December 31, 2018.

(in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at December 31, 2019	Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$1,953	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
			Conversion date	Dec 2022 – Dec 2026 (Dec 2024)
Mortgage servicing rights	$3,263	Discount cash flows, computer pricing model	Constant prepayment rate	0.0% - 24.3% (11.7%)
			Probability of default	0.0% - 100.0% (2.7%)
			Discount rate	10.0% - 11.5% (10.1%)
Impaired loans (collateral-dependent)	$3,217	Market comparable properties	Marketability discount	7.0% - 99.0% (46.0%)
Other real estate owned	$12,593	Market comparable properties	Comparability adjustments	6.0% - 29.8% (11.3%)

(in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at December 31, 2018	Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Equity securities at fair value	$1,173	Discount cash flows, computer pricing model	Discount rate	8.0% - 12.0% (10.0%)
			Conversion date	Dec 2022 - Dec 2026 (Dec 2024)
Mortgage servicing rights	$3,607	Discount cash flows, computer pricing model	Constant prepayment rate	7.0% - 28.1% (9.5%)
			Probability of default	0.0% - 100.0% (2.6%)
			Discount rate	10.0% - 11.5% (10.1%)
Impaired loans (collateral-dependent)	$747	Market comparable properties	Marketability discount	0.0% - 95.1% (41.5%)
Other real estate owned	$6,500	Market comparable properties	Comparability adjustments	6.0% - 47.6% (14.9%)

Fair Value of Financial Instruments and Levels within the Fair Value Hierarchy of the Valuation Techniques

The following table presents estimated fair value of CTBI’s financial instruments as of December 31, 2019 and indicates the level within the fair value hierarchy of the valuation techniques.  In accordance with the prospective adoption of ASU 2016-01, the fair values as of December 31, 2019 were measured using an exit price notion.

(in thousands)						Fair Value Measurements at December 31, 2019 Using
		Carrying Amount				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents		$	264,683			$	264,683			$	0			$	0
Certificates of deposit in other banks			245				0				245				0
Securities available-for-sale			599,844				54,263				545,581				0
Securities held-to-maturity			517				0				517				0
Equity securities at fair value			1,953				0				0				1,953
Loans held for sale			1,167				1,191				0				0
Loans, net			3,213,568				0				0				3,283,876
Federal Home Loan Bank stock			10,474				0				10,474				0
Federal Reserve Bank stock			4,887				0				4,887				0
Accrued interest receivable			14,836				0				14,836				0
Mortgage servicing rights			3,263				0				0				3,263
Financial liabilities:
Deposits		$	3,405,572			$	865,760			$	2,560,271			$	0
Repurchase agreements			226,917				0				0				226,921
Federal funds purchased			7,906				0				7,906				0
Advances from Federal Home Loan Bank			415				0				446				0
Long-term debt			57,841				0				0				49,382
Accrued interest payable			2,839				0				2,839				0
Unrecognized financial instruments:
Letters of credit		$	0			$	0			$	0			$	0
Commitments to extend credit			0				0				0				0
Forward sale commitments			0				0				0				0

The following table presents estimated fair value of CTBI’s financial instruments as of December 31, 2018 and indicates the level within the fair value hierarchy of the valuation techniques.

(in thousands)						Fair Value Measurements at December 31, 2018 Using
		Carrying Amount				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents		$	141,450			$	141,450			$	0			$	0
Certificates of deposit in other banks			3,920				0				3,914				0
Securities available-for-sale			593,746				91,028				502,718				0
Securities held-to-maturity			649				0				649				0
Equity securities at fair value			1,173				0				0				1,173
Loans held for sale			2,461				2,518				0				0
Loans, net			3,172,730				0				0				3,175,908
Federal Home Loan Bank stock			14,713				0				14,713				0
Federal Reserve Bank stock			4,887				0				4,887				0
Accrued interest receivable			14,432				0				14,432				0
Mortgage servicing rights			3,607				0				0				3,607
Financial liabilities:
Deposits		$	3,305,950			$	803,316			$	2,513,084			$	0
Repurchase agreements			232,712				0				0				232,796
Federal funds purchased			1,180				0				1,180				0
Advances from Federal Home Loan Bank			436				0				468				0
Long-term debt			59,341				0				0				44,166
Accrued interest payable			2,902				0				2,902				0
Unrecognized financial instruments:
Letters of credit
Commitments to extend credit		$	0			$	0				0			$	0
Forward sale commitments			0				0				0				0

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